Unemployment lifts just days out from election

1 week ago

The national unemployment rate has jumped to its highest level since the middle of last year, reaching 5.2 per cent and putting pressure on the Reserve Bank of Australia to consider an interest rate cut as early as next month.

The Australian Bureau of Statistics reported on Thursday that despite a 28,400 increase in the total number of people with a job through April, the unemployment rate edged up for the second consecutive month, from a revised 5.1 per cent in March.

Total full-time employment fell by 6300 in the month, offset by a 34,700 increase in part-time employment.Credit:Louie Douvis

Total full-time employment fell by 6300 in the month, offset by a 34,700 increase in part-time employment. Ahead of a federal election, there is usually a lift in part-time employment as the electoral commission takes on staff.

The more stable trend measure of unemployment has now increased for four consecutive months.

The bureau also reported a lift in the under-employment rate, which reached 8.5 per cent, up 0.2 percentage points on the March result.

Among the states, unemployment lifted in NSW (to 4.5 per cent), Victoria (to 4.9 per cent), South Australia (to 6.1 per cent), Western Australia (to 6.1 per cent) and Tasmania (to 6.8 per cent). It fell in Queensland to 5.9 per cent.

The RBA, in its monetary policy statement released last week, cited the unemployment rate as a key factor in the future direction of interest rates.

It has noted that the jobless rate needs to fall to 4.5 per cent to push the inflation rate back to the middle of its 2 to 3 per cent inflation target band.

The Australian dollar immediately fell on the release of the figures, edging down from US69.25¢ to US69.08¢ by 1136 AEDT.

Ahead of the figures, financial markets put the chance of an interest rate cut at the RBA's meeting next month at 41 per cent.